1983 Legislative Session: 1st Session, 33rd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

THURSDAY, AUGUST 4, 1983

Morning Sitting

[ Page

613 ]

CONTENTS

Routine Proceedings

Property Tax Reform Act (No –– 1), 1983 (Bill 7). Second reading.

Hon. Mr. Ritchie –– 613

Mr. Stupich –– 615

Mr. Blencoe –– 617

THURSDAY, AUGUST 4, 1983

The House met at 10:05 a.m.

HON. MR. WATERLAND: On behalf of the member for Cariboo (Hon.

A. Fraser) I would ask the House to join me in welcoming Guy and Nettie

Cawley from Williams Lake.

Orders of the Day

HON. MR. GARDOM: Leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Second reading of Bill 7, Mr. Speaker.

PROPERTY TAX REFORM ACT (NO. 1), 1983

HON. MR. RITCHIE: It is my privilege to propose second

reading of the Property Tax Reform Act (No. 1), 1983, but before

talking about the contents of the bill, I want to talk about its

background. Knowing what lies behind this bill will assist hon. members

to appreciate the value and urgency of property tax reform.

The property tax is a major source of government revenue in this

province. Last year aggregate property tax collections exceeded $1.7

billion. This represents a significant burden on all classes of

taxpayers, and for residential taxpayers it is often their largest

single annual bill. The sheer size of the property tax burden has been

a problem in itself. The government has been addressing this issue

through its restraint program, through maintenance of revenue-sharing

unconditional grants, and through a variety of other measures. The

naive and simple approach to all property tax problems would be to

resort to the familiar slogan: "Eliminate property tax." Although our

long-run aim is to reduce substantially our reliance on the property

tax, short-run elimination is not the answer.

The property tax remains the largest and most practical source of local government

revenue. It is important to municipalities for both fiscal and autonomy reasons.

The property tax will be with us for some time to come; our job is to make it

as tolerable as possible. By far, the greater problem has been growing instability

in distribution of the property tax burden among classes of taxpayer. Instability

is a dry, technical sounding word, but it has profound consequences for equity

and economic recovery. An unstable property tax system is an unfair one, because

it produces large, arbitrary shifts in tax burdens. Likewise, an unstable system

inhibits economic recovery because it produces unpredictable tax changes that

make business planning unreliable. The old property tax system which this bill

is replacing was not fully able to solve the problem of instability. Under the

old system a set of uniform assessment ratios was used to minimize property

tax shifts among the nine classes of property at the provincial level. This

approach relied on the assumption that real estate markets and price trends

would behave exactly the same way in every part of British Columbia. Unfortunately,

Mr. Speaker, this assumption has proven to be inaccurate and has been especially

unreliable in the volatile property markets that we have experienced here in

the past several years. The result has been a random pattern of erratic tax

shifts.

In some communities in some years the residential share of the total

property tax pie has risen dramatically, while the non-residential

share has fallen. In other communities precisely the opposite has

happened. All of these shifts were primarily the result of inflationary

market forces. Under the old system, both provincial and municipal

officials were helpless to correct these local variations. So that, Mr.

Speaker, is an outline of the background to this bill. The situation I

have just summarized demanded vigorous action, and this bill is our

response.

The Property Tax Reform Act is much more than a piece of paper. It

is the product of a lengthy consultative process undertaken by my

colleague, the Minister of Finance (Hon. Mr. Curtis), and my

predecessor, the Minister of Education. Their hard work and imagination

deserve the gratitude of this House, Mr. Speaker.

I also wish to commend the many representatives of local government

and taxpayer groups who participated in the 14 regional meetings

leading up to the preparation of this legislation. Their contribution

and the views of the general public played a major role in shaping this

bill. Finally, I must mention the able support provided by senior staff

from both ministries.

As its title suggests, the Property Tax Reform Act (No. 1), 1983, is

part of a larger property tax package. Some companion legislation will

be presented by my colleague the Minister of Finance. Taken together,

the various legislative components of the package represent the biggest

property tax reform ever undertaken in British Columbia.

Mr. Speaker, the twinnings of the property tax reform package are

fairness and simplicity. I have already demonstrated that our stability

and predictability are essential to fairness. Our reform measures will

also enhance fairness by increasing tax exemptions for the most heavily

taxed groups in our society and by introducing the calculation of

interest on tax overpayments. The reform package achieves greater

simplicity in both the assessment and tax fields. The old, unstable

system of assessed value derived from assessment ratios will totally

disappear by 1984; so will the confusing notion of mill rates. In their

place we will substitute a far simpler system of tax rates based on

market value.

How does this bill fit into the total reform package? The Property

Tax Reform Act (No. 1) is the keystone of the entire package. It

introduces the fundamental concept of variable tax rates, which will

eventually be extended into all property tax systems. It contains

significant exemption increases for hard-pressed commercial and

industrial taxpayers and presents some of the important assessment

reforms without which the package would be incomplete.

Mr. Speaker, let me describe in a little more detail the principles

underlying this bill. I will deal with the assessment taxation

exemption on the interest measures in succession.

This bill establishes actual or market value as a basis for

municipal property taxation, beginning this year. Gone is the old

system under which different classes of property were assessed at

different percentages of actual value according to assessment ratios

set annually by the province. Also gone is the old system of municipal

options (a), (b), (

c) and (d). The whole confusing edifice is being

dismantled and replaced by one simple principle: taxation based on

actual value calculated at rates expressed in dollars per thousand

dollars of actual value. Under the provisions of this bill the

principle of taxation based on actual value has been confined for 1983

to the municipal system. That in fact is the sole reason for

[ Page 614 ]

retroactive clauses in this bill. Under companion

legislation this principle will be extended into all other property tax

systems this year.

Some hon. members may wonder why we changed the municipal system a

year before other systems. I should indicate our three basic reasons

for doing so. First, many municipal councils urged us to make the

changes as soon as possible. Second, municipal officials claimed and

subsequently proved that they had the capacity to cope with the changes

in 1983. Finally, several municipalities had experienced a system

somewhat akin to actual value, the old option (d). The proof of the

pudding is in the eating, and I am pleased to report to the House that

the implementation of our 1983 municipal property tax reform measures

was an outstanding success.

That leads me naturally to a discussion of the most important of

those measures, the new variable tax rates system introduced in this

bill. I have already alluded to the instability that plagued the old

system. The new variable tax rate system will prevent erratic shifts in

tax burdens among property classes. It will be responsive to local

trends in real estate values. These two features distinguish it from

its predecessor and make it vastly superior.

[10:15]

The concept of variable tax rates is basically simple. Under the new

system each municipal council has the responsibility to set an

individual property tax rate for each class of property within the

community. There are presently nine classes of property, and they are

as follows: residential, utilities, forestry, machinery and equipment,

industrial, business and other, tree farm, resort-recreation fraternal

and farmland. Even in a small community different classes of property

can experience significantly different price trends. The differences

among regions are well known. The flexibility of setting individual tax

rates on a local basis for each property class is essential in a

province as large and diverse as British Columbia.

I want to emphasize the complete autonomy that this bill gives

municipal councils to set their municipal tax rates. We have forged a

partnership in restraint with local government, and this is a further

demonstration of our trust. This is a realistic position because we

believe in responsibility of local government. Elected official

councils know local circumstances. They are accessible and accountable

to local voters and responsive to local needs. We are confident that

municipal councils can manage their taxation better than our Victoria

bureaucrats. Only flagrant abuse would sway us from this belief, and

our monitoring has not disclosed any serious problems.

Mr. Speaker, the variable tax rate system also complements our restraint program.

I am pleased with the combined impact of expenditure restraint,

stable revenue-sharing grants, and variable property tax rates on the

overall property tax picture in British Columbia. What's more

important, I am confident that the average taxpayer recognizes the

cooperative work we have done to hold the line on property tax

increases. From my perspective, that is the highest measure of success.

It looks like a large majority of municipalities have managed to

deliver budgets at below the 5 percent level. Many are actually below

the 1982 level. For instance, Kamloops, Victoria, Port Coquitlam, North

Vancouver district, North Cowichan and Duncan were all projecting

decreases from their 1982 budgets; in the case of Kamloops, by over 6

percent.

The favourable combination of stable municipal budgets and stable

provincial grants has permitted most municipalities to hold the line on

property taxation. The general level of municipal property taxation has

not increased significantly but the pattern varies from place to place.

Different municipal councils chose to use the new variable-rate system

to accomplish different objectives. For instance, the city of Victoria

was planning to hold residential and commercial property tax revenues

at 1982 levels while providing a modest break for the industrial class.

Several other municipalities, notably Surrey and Langley, are planning

somewhat similar strategies. On the other hand, many communities, such

as Saanich and North Cowichan, are using variable tax rates to reduce

the burden on the residential class, or at least allowing residential

taxpayers to enjoy the benefits of declining assessment. Admittedly,

these are just samples of a much larger experience, but I believe they

are fairly representative of the general picture of stable property

taxes and responsible use of variable tax rates. As I said earlier, I

am greatly encouraged by present trends and the future potential.

This bill also deals with the issues of mill rate limits, debt

limits, requisition apportionment and tax-sharing agreements. Under the

old system many arrangements operated under formulas expressed in terms

of mills. I have to use the obsolete phrase for purposes of

illustration. Now that actual value has replaced assessed value as the

tax base, the old numbers are no longer valid. For instance, a one-mill

limit under the old system might have represented $100,000 worth of

revenue, but under the new system one mill might raise as much as $1

million. To prevent unintended tax shifts we must therefore have the

power to open up these arrangements and substitute appropriate numbers

suitable to the actual-value tax base. For instance, we might

substitute a limit of one tenth of a mill, or its modern equivalent,

ten cents per thousand dollars of actual value. This is a technical

matter aimed at maintaining stability. For similar reasons we are

changing the farm exemption from $5,000 in assessed value to its actual

value equivalent of $50,000.

On the issue of exemption, I'm proud to confirm that this bill will

be used to introduce higher property tax exemptions for industrial and

commercial tax payers. As hon. members know, residential tax payers

enjoy the benefits of a homeowner grant program worth a quarter of a

billion dollars. Likewise the importance of our productive farming

communities is recognized through property tax exemptions. Industrial

and commercial properties have carried heavy tax loads, partly as a

result of the old assessed-value system, which made a significantly

greater percentage of their actual value taxable. It is therefore

timely that during this period of economic recovery this bill

authorizes the use of regulations to provide new industrial and

commercial property tax exemptions. Through a companion regulation

under the Education (Interim) Finance Act the contemplated level of

exemption is $10,000. The government intends to raise the machinery and

equipment exemption to $50,000, and these measures will take effect in

Finally, Mr. Speaker, I want to mention this bill's provision for

the payment of interest on property tax refunds. There is an important

principle of fairness here. If an individual's property tax payment is

too little or too late he faces penalties in interest; it is therefore

only fair that if an individual's tax is reduced — say by a successful

assessment appeal — he should receive interest on the excess refunded

to him.

[ Page

615 ]

Mr. Speaker, the principles of this bill commend themselves to the

House. They have already achieved success, and have been greeted

enthusiastically by local officials and the general public. I therefore

proudly move second reading of this bill, now.

MR. STUPICH: By bringing in this bill today the government is

showing that it is still floundering from flounder to flounder. The

government doesn't seem to have any idea at all why we were called

together six weeks ago. Six weeks ago this House was called into order,

and we listened to an opening speech read by His Honour the

Lieutenant-Governor.

MR. REID: And a good one.

MR. STUPICH: Someone says it was a good one. I think I'd like

to remind that particular member of just a few of the words: "May I

express the wish that your goals and aspirations and the needs of the

people you represent will be met in the course of your service as

individual members and as the Legislature." Then he wound up by saying:

"I pray that in carrying out your duties you will reflect fully on the

effect and example of your decisions on the people of our province and

country."

We've just heard the minister open debate on Bill 7 with a six-,

seven- or eight-page load of, essentially, garbage. There was some good

material in there, but material that has not been available to the

opposition. We had no idea at all what the minister was going to

present in introducing second reading of this bill, and now the

opposition is expected to give a detailed analysis of legislation that

the minister himself knew so little about that he had to read word by

word from a document that apparently he's never seen before. What are

we doing here on the morning of Thursday, August 4? What does the

government have in mind? Do they have any plans at all for the future

of this Legislature for looking after the needs and aspirations of the

people of this province?

We heard a budget. We discussed that budget for three days, We

discussed Bill 3 at great length. What's happened to Bill 3? We

discussed Bill 9 at length. The government backed away from that;

apparently they don't know what to do with it. We discussed Bill 13.

They don't know what to do with that so they've drawn that back. Now

they're bringing in Bill 7. The minister talks about the urgency of

dealing with this legislation that he tells us has been in effect for

three months. The municipalities have all gone ahead and acted on this.

To the member down there who has so much to say when he's sitting down

— look at the commencement date: "Sections I to 5, 7 to 9, 11, 13 to 19

and 21 shall be deemed to have come into force on the earliest date

necessary to give them retroactive effect for the 1983 taxation year."

That date was in advance of the budget date, perhaps even in advance of

the election date.

We don't need this legislation. Why aren't we talking about an $8.5

billion budget and getting some approval or disapproval, changes or

amendments or something? This government has been floundering for two

years trying to make up its mind and trying to get up the guts to go to

the people with an election. They finally did that, and they won.

They're proud of having won. Having won they have absolutely no idea

what to do in the kitchen.

They brought in a throne speech, and we did get through that. They brought

in a budget; we abandoned it. I don't know whether we'll ever see that

budget again. The government did get approval to spend the money for nine months

without any serious consideration of any of the details of that budget, then

abandoned discussion of it completely and moved into legislation. We are now

into the third bill. Bill after bill is discussed and considered. They listen

to the opposition; they realize what a terrible mistake they have made. Now

we're on the fourth of some 26 bills that were introduced with the budget.

As they listen to the opposition in the House and to the growing opposition

in the community, they realize that all of their well-made plans — plans that

were not revealed during the election campaign, when they didn't tell what

they were going to do to the people if they won the election.... As they listen

to those well-made plans being torn apart — not just by the opposition, not

just by people from every walk of life in British Columbia but also by people

all over Canada and internationally, and by the World Council of Churches —

they realize what a terrible mistake they have made, bill by bill. Now they've

brought one more in and say: "Well, let's get this through, just to

show that we can accomplish something because, after all, it’s in effect."

Interjection.

MR. STUPICH: The minister of something-or-other is asking if

I'm going to block that too. If I thought that minister and his cabinet

and his government had any idea at all or any plan for action.... If

they'd tell us that there is some game plan, not simply to call us here

and waste a summer, and if they knew what they wanted to do, then

perhaps we'd cooperate about passing some of the legislation. But

bringing up legislation today, six weeks after this House was called

into order, to rubber-stamp something that has been in effect for three

months is an insult to the Legislature, to the people of the province

and to your own back-benchers, but none of them will stand up and say

that.

In some of the garbage that the minister read out, he started

talking about the difference between actual value and assessed value.

Look at the definition of assessed value in the old legislation; it was

based on market value. What is market value? There's no such thing, is

there? Market value can change from day to day. It's whatever happens

between a willing buyer and a willing seller, and one of them is more

willing and anxious than the other. What does market value mean? What

does assessed value mean? Somebody has to come up with a figure if

we're going to rely on property taxation to the extent that we have.

The minister talks about what a great change this is going to be, to

change the word and say that from now on instead of talking about

assessed value we're going to be talking about actual value.

Interjection.

MR. STUPICH: Mr. Speaker, the Minister of Consumer and

Corporate Affairs (Hon. Mr. Hewitt) is getting into the debate, and I

hope he'll get up on his feet. I think what he's telling me is that I

have absolutely no faith in his administration to administer this or

any other legislation. That's certainly the truth.

There is no fundamental difference between actual and market value,

except that you're using a different word and there are different

letters in it. The minister talks about how proud....

[ Page 616 ]

Interjection.

MR. STUPICH: I can't see that that has anything particularly

to do with this bill, but if you've got anything to say about this

bill, I'd love to hear it. Mr. Speaker, would you tell him that if he's

got anything to say he should get up on his feet and say it, in due

course? He's saying it, yes, but he's got to get up on his feet to say

it.

[10:30]

The minister is proud that in some cases property taxes have been

kept down for some people, and he read from selected statistics to

prove that. I could bring in some statistics to show him what has

happened to the property value of people in my riding. Surveys are

being taken in different parts of the riding to show what has happened

to property taxes, and he's saying they're not happy, but this bill

was....

Interjection.

MR. STUPICH: He's not happy. Okay, they're not happy, and

this bill was in effect, and this bill was supposed to cure all ills.

This bill has failed the people of that community, and, I suspect, has

failed the people in communities all over the province.

Interjection.

MR. STUPICH: He'll have a chance in second reading. If he

would say it louder, so I could respond, I wouldn't mind, but he's sort

of grumbling in the background. He doesn't have any more notes. He's

stuck. He can't say any more because he doesn't know anything about

this legislation.

Interjections.

MR. STUPICH: What facts? I'm asked why I would bother with

facts. "Where are the facts? Show me the facts." The minister has

talked about how it has kept property taxes down, and I can produce

evidence to show that it has not kept property taxes down. I can

produce evidence to show that the budget itself.... Remember the one we

were going to debate four weeks ago? Four and a half weeks ago we

started, and we gave it up. The budget has apparently been withdrawn or

abandoned or whatever. There was something in there about property

taxation.

Interjections.

MR. SPEAKER: Order, please. Hon. members, the member for

Nanaimo has the floor, and he is entitled to continue without

interruption. Other members will have an opportunity to debate when

they have the floor.

MR. STUPICH: The government did bring in a budget. The

government has accused us of holding up things, of filibustering, of

not letting them get on with their business. Someone says: "Agreed." I

don't know who it was — it doesn't matter.

HON. MR. HEWITT: You've been wasting the time of this House for weeks.

MR. STUPICH: The Minister of Consumer and Corporate Affairs

seems to be working very hard to make sure that he does not serve the

consumers in any way at all. His attitude seems to be that if the

consumers can't stand up and fight on their own behalf, they should not

come to government and seek his assistance. That's his attitude as

minister of that department. Okay, that's his attitude, and so be it.

Mr. Speaker, if I may get back to the budget and their concern that we are holding up the business of the House....

Interjection.

MR. STUPICH: I'm not going to remind you, because you know.

Through you, Mr. Speaker, may I remind them that there is a set time to

debate the budget, and if they'd bring that budget on they know that

they can complete debate on that budget within a period of ten days.

Why have they abandoned it? Are they afraid that some of their own

backbenchers will have the intestinal fortitude to stand up and say

this budget is bad for the people of British Columbia? If they want to

do something for the people of the province, that government can — if

they think that budget is going to be of any help. I think it will

hurt. Maybe by now they think that it will hurt. Maybe they're

redrafting the budget. Let's hope they are going to bring in a new

budget. That would be the best news of all for the people of the

province, if that's really what they have in mind.

What other excuse can they have for abandoning a budget and bringing

in legislation — this is the worst insult of all — that has been in

effect for three or four months and will accomplish nothing? The

government is hoping they'll bring in something that we'll vote for and

get it out of the way. Then they can say: "Well, we've accomplished

something. We have one bill passed." If that's all they want, they've

got the Supply Act passed. Let's go back to the budget and talk about

the real problems in the province of British Columbia. Let's quit this

nonsense about the difference between actual and assessed value. Let's

quit this nonsense about moving from a mill rate to a cents-per-dollar

rate. What's the difference? A mill is a tenth of a cent. Isn't this

wonderful? We're moving away from mills to cents — ten to one. If

that's all this bill is accomplishing, it certainly isn't worth

postponing debate on Bill 9, Bill 13, Bill 3 and, above all, postponing

debate on the budget.

We are not the ones who are holding up progress in this House. It's

the government's own lack of intestinal fortitude and its own inability

to plan beyond day-by-day, hoping to get something accomplished. It's

the government's own fear of the budget and their concern about having

the details of that budget talked about by the opposition and

apparently the unwillingness of the back-bench members and the cabinet

ministers on the government side to talk about the budget at all that

is holding this up. It's their lack of intestinal fortitude in pulling

back the budget that is holding up progress in this House.

If we could get back to dealing with the budget, then at least we

would know the pattern for debate in the House. We'd have some idea of

what the government planned to do. Frankly, Mr. Speaker, it's a

complete mystery to us. Why are they afraid of talking about that

budget? Certainly I would be if I were the Minister of Finance. I

wouldn't want it talked about. To give him some.... No, I won't,

because it's not

[ Page 617 ]

his budget anyway. It was the Premier who actually drafted the terms of that budget, as far as I am concerned.

The opposition resents being asked to debate Bill 7 this morning.

Six weeks after the House came into session we're being asked to deal

with something that has been in effect for ten weeks. The

municipalities have all been acting on it. It is supposed to have done

so much for them, yet if I had had the opportunity this morning I could

have brought actual figures in here to show how much property taxes

have gone up for individuals. It has not helped them. Who has it

helped? Some people have experienced reductions in taxes — some

industries and some businesses, in particular. But is that really what

we're trying to achieve?

If they don't want to talk about the budget, then I'll talk about it

a little bit. They raised the rural taxation rate on property taxes.

They're talking about keeping property taxes down, but they raised the

rate of taxation. In addition to that they have unloaded further costs

on the municipalities. It used to be that there was 75 percent sharing

for certain approved municipal works. They have now said 25 percent.

Mr. Speaker, how can they talk about having the municipalities pay

three times their previous proportion of paying for capital works like

that and still talk about how this bill is going to keep down property

taxes? It doesn't wash. We need more explanation. We need to get

through the budget before we know the effect of the budget upon

property taxes.

I can't blame the Minister of Municipal Affairs for not having dealt

with the budget, except that he is a member of cabinet, and although he

didn't attend the cabinet meeting yesterday when plans were apparently

were made to bring in Bill 7 today, someone must have. There are a few

cabinet members in the House. Perhaps they would like to get up and

discuss Bill 7 in the context of the budget and tell us why it is so

important that on Thursday, six weeks after the House was called into

session, we completely abandoned all discussion of the government's

overall plans for the future of the province of British Columbia —

within the next term and certainly within the next year — because we

have to discuss Bill 7. It is a bill which the minister himself said

isn't terribly important today, because it has been in effect for some

eight weeks. People have acted on it. He even boasted about how much

money it has saved certain property owners. So it's great.

I have to come back to my original question. On a sunny Thursday in

August, if the government doesn't have any plans, doesn't know where

it's going, what its direction is or what it wants us to accomplish in

the House, then why don't they take a week off? Adjourn the House for a

week, or a month. I don't know, perhaps it would take them a year; they

apparently are very slow thinkers. Give them the time they need to

prepare some plan so that when they bring us back they will know what

they want to accomplish. Then they can tell us what they want to

accomplish, and maybe this House will get down to doing some of the

business that His Honour the Lieutenant-Governor adjured us to do on

behalf of the people of British Columbia.

What have we done for them? So far we have passed a supply act. We

did have a throne speech debate — a very general debate about their

plans, which gave some concern in the community. They didn't know the

real concern until they saw the legislation dumped on budget day;

that's when the concern really built up. People have a right to have an

opportunity to know about the discussion of the budget. This kind of

legislation can really only be considered in the context of the budget

as a whole. It's not a case of opposing this or any of the other

particular 26 bills. It's a case of opposing a government that is so

rudderless that if the Premier is running the show as he said he

was.... He doesn't need a deputy leader anymore. He certainly needs

something, because apparently without the deputy leader he's lost all

sense of direction. He has no idea what he wants to accomplish in the

session. He can't tell his own crew, let alone the members of the

opposition and the public in and outside British Columbia.

This government has no idea at all where it's going. It's bringing

in bill after bill, listening, then abandoning them and moving on to

the next one. It's not a case of voting against or for this bill. It's

a case of voting right now against a government that doesn't have any

idea at all what it wants to do.

MR. SPEAKER: Prior to recognizing the second member for

Victoria, I would remind all members that in debate on second reading

we discuss the principle of the bill. I think that members will agree,

upon reflection, that some considerable latitude was taken in the last

address. I would ask members, when discussing Bill 7, to remind

themselves to discuss the principle of the bill.

MR. BLENCOE: Mr. Speaker, your comments about how we approach

this bill are interesting. But I also think this bill reflects the

total approach to financial management and fiscal responsibility in

terms of what the provincial government wants to see happen in the

province, particularly in municipalities. It's very important,

therefore, that the discussion be given a wide perspective, because the

tax system that is given to a municipality which allows them to collect

revenue for their....

Interjection.

MR. BLENCOE: I'm talking about the tax system that is in

place for a municipality to operate its functions, its infrastructure

and its government facilities, which is indeed a very big issue. It's

not just about variable mill rates or how you go about collecting the

taxes.

The municipal level of civic government is the cornerstone of all

governments in Canada, and in western democracy. What they do, how they

operate, how they fund themselves, is a critical issue. Whether we talk

about a variable mill rate and the implications of this particular

bill, or whether we stick to just the particular clauses, is not the

point. What we are talking about in this bill, and the issues

surrounding it, is the whole financial structure of the most important

— in my estimation — level of government in this country.

Municipal government is extremely accountable and accessible;

consequently, the financial methods in place for collecting their

revenue is one that is scrutinized heavily by the local taxpayer. It is

one that you can very quickly and directly ask the local council to

review and take into consideration. That's extremely difficult with

other levels of government, particularly provincial and federal.

[10:45]

When we talk about this particular act, I think we have to talk

about the full implications of the financial structure of

municipalities. Indeed, that is the root of many of their problems. I

won't go into the particular sections of the act at this time. What I

would like to talk about initially are the

[ Page 618 ]

problems of generating revenue at the municipal

level. Literally hundreds of studies and commissions, not only in

British Columbia but also across this country and in other

jurisdictions in North America, have tried to come to terms with the

financial arrangements and financial problems that municipalities

experience. For almost a hundred years experts in financial management

have said that the ways of generating revenue through municipalities

are archaic, antiquated, unfair and unjust. Indeed they are.

[Mr. Strachan in the chair.]

I would ask the Minister of Municipal Affairs to take a look at the

report of the Ontario commission on tax reform. It's an extremely good

document; in my estimation, it's one of the best documents done in this

country in the last 50 years. They came to a number of conclusions, but

the overall conclusion of the commission in that study was that in the

long term the real estate tax and the inherent inequality in that

system has to go.

Other studies done in British Columbia and in other jurisdictions in

Canada and in the United States say, basically, that the real estate

tax system, the method of generating revenue for civic functions, is

unfair and unjust. It is based on a system that I call the unearned

wealth syndrome. What happens is that a business person's taxes are

based on what that particular piece of property or the building

situated on it will bring in the real estate market. It's not

particularly scientific. It's based on what's happening in the real

estate market of the day. Thousands and thousands of British Columbians

who want to live permanently in their homes, who have no intention of

moving on or selling, are faced with taxes based upon what their homes

or their businesses will bring in the real estate market.

We have seen incredible episodes, particularly in the last few

years, in which speculation and property flipping created untold

problems for homeowners. Someone will sell his home, making a profit as

quickly as possible; the ripple effect on the other 99 percent who

don't want to sell their home or leave that particular street is that

they pay taxes on what that house brought. Two years ago profits of

$20,000 to $30,000 were being made in a week or ten days on houses that

were flipped — I know they certainly were in this city. Taxes that year

were based on that speculation and flipping. It's not right,

particularly for those on fixed incomes. The majority of people don't

want to participate in the unearned wealth syndrome — flipping and

causing taxes to go up. The only people who benefit are those involved

in the flipping. All of us are involved in the cost of that kind of

unearned wealth syndrome.

In my estimation, in the estimation of my party and in the

estimation of many commissions over the years, that particular element

is the root problem of the real estate tax system. It is not based in

any form upon the ability to pay. It's based on what the computer says

to the Assessment Authority and on a few sales in a few areas of the

city. You think your house is worth maybe $60,000 or $70,000, the

person down the street sells their house for $150,000 because somebody

from Alberta has got the money to pay for it, and suddenly your taxes

are based on a $150,000 house. Many people in this province and in this

city, the one I know best, cannot afford those kinds of taxes. That is

the thing we should be getting at: that our own wealth, the real estate

system that generates money for municipalities, is not based upon the

ability to pay or upon one's income on an annual basis.

As chairman of finance for the city of Victoria I had the — I

wouldn't say privilege.... But I was certainly there at the time when

this came in. They call this retroactive; it's now in place, as we all

know. I was chairman of finance when we had to take a look at that

particular piece of legislation. All municipalities have been forced to

take a look at this legislation and how it can be utilized. The

variable mill rate per se is not an evil or bad piece of legislation;

on the contrary. But what I would say to the Minister of Municipal

Affairs and to the Minister of Finance is that it is no panacea at all.

Basically all the province is doing is removing themselves from the

responsibility of trying to ensure that the most efficient level of

government has a tax system that is fair and equitable. They're

removing themselves from the responsibility of trying to find a system

that gets to the real root problems of the municipal revenue-generating

system. The way they're doing that is by removing themselves from the

responsibility of setting the levels of taxation for particular

properties, and saying to local municipalities: "It's your problem now.

You pick your own levels; you spread around the inadequacies of that

tax system to the best of your ability. At the same time, we in the

provincial government will continue to curtail and cut back on

provincial revenue-sharing grants" — making it extremely difficult for

the municipalities to balance their budgets and maintain their

operations in a satisfactory manner. What the government is doing is

removing themselves from the responsibility, with the UBCM and all

municipalities, of saying to the province of British Columbia: "Yes, we

admit that the real estate system is archaic. It's time that it should

be totally revamped, and we look towards a system that's based upon the

ability to pay, not what your home or property will bring in a

speculation market or during an unearned wealth syndrome when it's in

full fling." We saw it two years ago, and this government knows the

results of that. They heard the whirlwind from taxpayers, all wanting

some reduction as quickly as possible. What this government has done is

to say: "Okay, we'll just allow you to shift it around and pick the

levels for each category, but we won't.... This government does not

have the guts or determination to say that what's required is an

in-depth, articulate, intelligent, radical alteration of the municipal

tax system.

This is a band-aid. All governments use band-aids; I have no

particular problems with band-aids. But when it comes to how

municipalities gain their revenue, may I remind my colleagues across

the floor and everyone else in the House that municipal government is

the most efficient, most accountable and the most accessible. I believe

that it's all of our responsibility....

Interjection.

MR. BLENCOE: You're right. I believe that. I think we all, on

both sides of the House, should take it upon ourselves to admit....

Take out the politics and rhetoric that the variable tax rate is a

great panacea and will solve all problems, and say that all we're

really doing is tinkering. We're not really resolving the long-term

problems.

I will remind my colleagues across the floor, when they introduce

and talk about — and they have in this piece of legislation, and I will

get to some of those sections either during this debate or during

committee stage.... They are

[ Page 619 ]

continuing to control the local municipalities and

their decision-making process and centralize to the provincial

government various aspects of decision-making the local municipalities

have traditionally had. We've seen this move to centralization in other

areas. You might as well abandon school boards now.

MRS. JOHNSTON: Rubbish!

MR. BLENCOE: Oh, yes. You might as well abandon school

boards, because what you're saying is that you're going to establish

how much money they can have, and all they're going to do is shift

around those dollars. That's all.

I would remind you, Mr. Speaker, that when you move to centralization and you tell people exactly....

Interjection.

MR. BLENCOE: They are an elected group, as municipalities

are. They are directly accountable to their taxpayers at election time,

and that is a long-standing tradition in Canadian local government.

School boards are elected, as municipal governments are, and....

MR. SEGARTY: Let them collect their own taxes.

MR. BLENCOE: Municipalities collect it for them.

They are accountable to people at election time. By your moving to

take in and control more of their activities, you are eroding — I

talked about it with Bill 9, and this minister has another piece of

legislation that it continues to erode — independent decision-making of

local school boards and municipalities. I don't know if people

recognize that it's not just a variable mill rate that's being

introduced. The Minister of Finance during the last few years has

brought down edicts saying municipalities can only spend 5 percent more

or less than their previous budget. He's tried to put it in terms of

taxes, but he knows darn well that that's not what he....He was trying

to give the impression that he was saying only taxes could go up 5

percent. We all know that wasn't possible. Now what the government is

saying is legitimizing the very position they were trying to take that

only taxes in local areas could go up a certain point.

[11:00]

There's nothing wrong with trying to keep down taxes. I think we all

recognize that we're all involved in trying to end the recession and

help where we can. But I would remind this government that elections go

on every year or every two years at the school board and municipal

levels. They are the ones who set their own budgets and priorities and

collect the taxes and are accountable if those taxes indeed go up.

That's the way it is. That's the way it should be. If it is the

intention of this government to take over more and more of the role of

local government, then they should be honest about that. They shouldn't

couch it in terms of acts such as this, that it's a great panacea and

that it's going to save people tax dollars, that they're going to pay

less taxes for their property, because they won't. Cities and villages

and towns still have to maintain their infrastructure. They still have

to provide those support services in an efficient manner, and dollars

have to be found from somewhere. In my six years in municipal

government, the last two years of them as the chairman of finance, the

limits on municipalities in terms of where they find revenue for their

operations are incredible. They really are.

When you think about what the federal and provincial governments can

do in terms of looking for new sources of revenue to maintain their

operations, municipal governments, under the Municipal Act, are the

children of the provincial government, and they're now going to become

the infants of the provincial government, because more and more there

is a step into their long-standing tradition of local autonomy and

decision-making.

Municipalities are strapped for revenue. Their powers to generate

additional revenues to ensure that the streets are maintained properly,

that the underground services are maintained properly.... When I

mention underground services, I would remind you that the minister has

just announced a major shift in provincial funding for underground

service maintenance. The provincial government traditionally has said

that underground services is the responsibility of the provincial

government, and it was on roughly a 75 to 25 cost-sharing basis. It's

now gone the other way. I don't think the people of this province

recognize the significance of that move. I was chairman of public works

for a couple of years, and it was always very difficult to get people

excited about sewers, drains and underground services. But in an urban

municipality or regional district like Vancouver those kinds of

services are critical to the orderly running of those municipalities —

the health aspects and the safety aspects.

This bill may be, in the eyes of this government, a panacea for

trying to do something about the real estate tax system, but what this

government is doing in numerous other areas — and the example I use is

the sewer and storm drain grant system — is removing a major source of

funds from municipal operations. What worries me, Mr. Speaker — and I'm

sure it worries many of my colleagues across the way who have been

involved in municipal politics — is that municipalities, towns and

villages will not be able to maintain those critical services properly.

They haven't got the revenue base to do it. You and I know that the

major source of revenue is property tax, but there's an ultimate amount

of money you can put on the individual homeowner, and I think we're

about there already. So what happens is that the municipality is forced

to look for other areas to maintain essential services. But they don't

have those options; the revenue is not there. So what do they do? They

put off essential maintenance. They allow those underground services,

those fundamental parts of the municipal infrastructure, to collapse

and deteriorate beyond the point of repair.

I really want to emphasize this point, because we have incredible

examples in the United States — and I know some of my colleagues across

the way who have been involved in municipal politics have read and

studied the results of municipalities' avoiding their responsibility in

maintaining the infrastructure of cities, villages and towns. In the

United States they now face the prospect of having to collect billions

and billions of dollars in taxes to repair the basic infrastructures of

cities and towns because the money has not been put there on an annual

or biannual basis. Municipalities will be put into that position; I

know it, Mr. Speaker. As the government removes itself from

responsibility at the local level — and this act does part of that....

As the provincial government removes itself from responsibility in

helping municipal operations, we are going to see an incredible

breakdown, I believe, in those municipal services. I hope the Minister

of Municipal Affairs will think about that most seriously.

A little bit more about municipal financing, something that some of my colleagues may not be aware of. As I said

[ Page 620 ]

before, I believe municipalities are the most

efficient level of government this country has. Everybody knows where

those dollars go. They know exactly the kind of services they get for

their dollars. They know that when they get their tax notice they can

get it broken down into how much is going where, how much of the

municipal pie is going to recreation or policing costs. This one

important element in municipal financial operations, which unlike other

levels of government, and particularly unlike this government, is that

municipalities, by law, have to balance their books. They cannot run

deficits. I'm not going to get into the intricacies of the pros and

cons of deficit financing, but I would say that the incredible onus

this government is putting on municipalities in terms of withdrawing

further funds — revenue-sharing this year will be cut back, cutbacks in

sewer and maintenance programs, millions of dollars into those

essential services — is putting municipalities into tighter and tighter

financial constraints, and yet by law they cannot run a deficit. So

what happens is that they will not maintain those essential services;

they will have to let them go; they will have to let them fall apart.

They will not have the revenue to pay for them, because if they have a

novel idea about how to collect new revenue.... I've seen it happen

before: you talk about it, and the provincial government very quickly

snaps it up and the municipal government is not allowed to utilize that

revenue-generating system.

The strain that this government is putting on local municipalities

by its decision to remove itself from the problem-solving process of

the municipal tax system is not the answer. This particular Bill 7 is

not the answer in terms of the long-term resolution of the real estate

tax system.

What I would like to see is this government admit that in its term

of office it's prepared to undergo or commission an in-depth study of

the real estate municipal tax structure. I'm not talking about

tinkering with the variable mill rate again, because that really

doesn't do anything. What I'm talking about and asking this government

to do is to have the guts and determination to try and find a new tax

system for municipal governments.

It is patently unfair and unjust that the senior citizens living in

their home for the last 50 years and trying to hold on to that home

because it's their shelter and it's been their family home.... It's

patently unfair that they should pay the same kind of taxes that the

$40,000 or $50,000 or $60,000 executive down the street or over the

block pays. It's crazy. It's ludicrous. I want to emphasize that. The

executive, or a person making $40,000 or whatever, who is actively

participating in the job market — and you have senior citizens on a

fixed income who have contributed to the community and the country over

the years.... How ridiculous that we should have a tax system that

taxes them the same as the executive director down the street.

MR. SEGARTY: We don't.

MR. BLENCOE: We do.

MR. SEGARTY: We don't. We give them homeowner grants.

MR. BLENCOE: You see, there we are. There we have the answer. Instead of taking a look at the fundamental....

MR. REID: Give us something positive. How would you do it? Where would you get the money from?

DEPUTY SPEAKER: I'll ask the hon. second member for Surrey (Mr. Reid) and the member for Kootenay (Mr. Segarty) to come to order.

MR. BLENCOE: Before I was rudely interrupted I was....

MR. REID: You weren't rudely interrupted.

DEPUTY SPEAKER: Order!

MR. REID: Tell the truth. Where does the money come from?

DEPUTY SPEAKER: Order!

MR. BLENCOE: Mr. Speaker, perhaps you should name this gentlemen finally. He's been an embarrassment to this House for five weeks.

I was about to try and....

Interjections.

MR. BLENCOE: I imagine the people in the gallery must be

totally amazed by this bizarre episode down here: a member of this

House trying to speak to this bill in, I hope, an intelligent, rational

and sane way, Mr. Speaker, and trying to give this government some of

my experience — and there'll be others on this side with experience at

the local level — and trying to enter into some kind of intelligent

discussion about a particular act.... I hope that is still permissible,

and that in this House, which is the senior government level in this

province, we haven't come down to where this man wants to come down to:

where we can't even talk about anything in a sane, rational and

intelligent manner. It is time that certain members of the government

recognize that there still can be an intelligent discussion of issues

in this House and that we can propose alternatives that are reasonable

and that should be taken up.

I was trying to say that what we have is a continuation of the

band-aid on a tax system that basically won't work and is unfair, and I

gave the example — and it's an honest one; it's the reality of the tax

system — of the executive director on a $40,000 or $50,000 salary

paying his or her taxes in the same system in which the senior citizens

are paying theirs. We heard: "Well, we give them a homeowner grant."

That's no answer to the problem; that's what I'm trying to get at. You

take in one hand, and you take general taxes in the other hand to

return to that senior citizen — their own taxes. You know darn well

that the tax system is unfair. The very fact that you have to have a

homeowner grant to alleviate the problems of the real estate taxes on

senior citizens is the very reason you should take a look at how to

build a tax system that's based upon the ability to pay — based upon

what you're earning and not on what the XY Real Estate Company thinks

they will get for your home. How stupid! How unscientific. Here we are

in the most advanced time with incredible technology, scientists,

financial analysts and economists. These are highly paid people who

have brilliant minds and who have ideas. Yet somehow we don't seem to

be able to come up with a tax system that removes the reason we have to

help our

[ Page 621 ]

senior citizens through the back door through a homeowner grant on the real estate tax system.

[11:15]

The system is flawed. That's the answer to that member over here, and he

knows it. You need a system that's fair, equitable, easily understood and

based, to a high degree, on the actual income of the person who is paying those

taxes. That's the challenge.

I would seriously ask the Minister of Finance and the Minister of Municipal Affairs to take up that challenge. Because....

MR. SEGARTY: Put some suggestions on the table. We're listening.

MR. BLENCOE: I've already suggested it. Devise a tax system

for municipalities that's not based upon the real estate market but

upon the person or the business utilizing those properties and that

land — based upon their income or their ability to pay. That's a

significant change from what we have now.

Interjection.

MR. BLENCOE: I suppose, Mr. Speaker, they're saying that the income tax structure is inequitable. All tax systems have their problems.

Interjection.

MR. BLENCOE: Mr. Speaker, I'm going to continue a little longer.

DEPUTY SPEAKER: Is the member indicating to the House that he's the designated speaker?

MR. BLENCOE: Correct, Mr. Speaker.

If we could do the proper business of this House.... Get back to the

budget and get off these bills, whose effects have been in place for

months, and do the business of this province in an orderly, rational

and intelligent way. How ludicrous it is that we're talking about

municipal affairs and tax structures at a time when this government has

delivered a budget that has a record deficit and is going to cost the

average British Columbian another $5,000 in debt servicing. We should

be debating that budget in this House instead of bringing in piece

after piece of legislation in a desperate attempt to try to get

something through this House. They know that British Columbians do not

support this budget or this government in terms of what they've been

doing in the last few weeks. They're desperate to get something

through, Mr. Speaker.

If they don't want to hear me talk about the implications of the

planning act or the variable mill rate, Mr. Speaker, they have the

course to follow. The course is to go back to the budget and have about

seven more days of, I hope, fairly intelligent and rational discussion,

and then proceed in an orderly fashion with Bill 1, Bill 2, Bill 3,

Bill 4, Bill 5 and down the line to 26. Do you know what we're doing?

We've done two or three days of budget debate; we've flipped back and

forth. The other day we had the tobacco tax and now we have the

variable mill rate. The NDP critic on finance matters was right on:

this government doesn't know where it's going. It's rudderless. This

bill talks about financial matters and how municipalities are going to

collect dollars and cents, but this government believes that it manages

the books well and the financial arrangements of this province well. It

does. It delivers a budget and doesn't allow the opposition or the

province of British Columbia to analyze or enter into a sequence of

events that allows us to debate their particular budget.

Here we are on Bill 7, after six weeks. We'd love to get back to the

budget debate. We'd love to take a look at why the budget is up 12 or

13 percent and yet we are having massive firings in the public sector.

DEPUTY SPEAKER: Hon. member, we are now straying quite a bit from Bill 7.

MR. BLENCOE: I know I am, Mr. Speaker, but there was a

question from an hon. member about why I was spending time talking

about, and having to be the designated speaker on, a piece of

legislation that we shouldn't be debating at this time. We should be

debating the overall budget, which is the point I was making, Mr.

Speaker.

MR. SEGARTY: Now they want to determine the government's priorities.

MR. BLENCOE: Mr. Speaker, we'd love to participate in the

government's priorities. We feel that the priorities are somewhat

warped and that you have forgotten that you are a government for all

British Columbians and not a select few. I think that's something this

government has forgotten.

Let's get back to the particular bill at hand. There are some

particular sections in here that I would like to address that are of

concern not only to myself but to some municipalities:

section 10,

exemptions for industrial or business property. There's always been a

belief, even with the archaic tax system that we have for municipal

purposes, that nobody should be exempt or have special privileges under

a tax system. This particular section, if you read it correctly, will

give special privileges to industrial property holders of business land

or businesses in particular municipalities: "In addition to the

provisions of any other act, the Lieutenant-Governor-in-Council may

make regulations prescribing exemptions from property tax levies under

any act, in respect of prescribed (

a) industrial land or industrial

improvements or both or (

b) business land or business improvements or

both, and different exemptions may prescribe for each class of

property."

Mr. Speaker, what this government is doing is deciding that

industrialists and business people have some special privilege. Maybe

the minister will clarify this, but what this says is that the cabinet,

at its whim, can decide to reduce the level of taxation for the

business and industrial sector. That's a fairly major shift in terms of

trying to derive a fair and equitable tax system for all. I don't want

to get into the politician's game of saying: "Maybe this could be

subject to abuse." I don't want to talk about the potentials for abuse

in this. I'm sure there have to be some very good reasons why this

government, in

section 10 of this act, would specially remove

industrial business land and say that it could have some special

rules apply.

Mr. Speaker, that could create some problems. For instance, why is the average

homeowner not given a special exemption here? Does the homeowner not have a

big enough lobby, or are they not close enough to this government, in terms

of being friends of this government, that they can have a

[ Page 622 ]

special

section in the act like the one that allows

cabinet to make exemptions or reductions in property taxes for

industrial and business holders of property?

I think we need some clarification in that particular

section if it

is the intention of government, when a particular business or a friend

says, "We can't handle our fair share of the municipal tax," to try to

find ways of exempting them. If the exemptions are granted, that

municipality is still faced with having to generate the revenue to

operate that municipality, and the load will fall on the homeowner.

There shouldn't be any special exemptions for industrial business

property. The fact that you have to put that in there is again an

indication to me that the property tax system basically doesn't work.

I know that industrial property holders in the city of Victoria went

through some real problems. I worked with them, along with my

colleagues on city council, to see if we could find some ways to

relieve their tax burden. To give you some insights into what was

happening and why those industrial property-holders were in trouble,

and why this minister and this government aren't tackling the root

problem, let me tell you what happened.

The majority of the property holders in the city of Victoria are

related to water. I think there are 93 of them at the last count and

going fast. They're adjacent to water egress. There are good reasons

for that, obviously: traditional transportation networks, commodities,

services and products coming in from the Inner Harbour. They are

particularly around the Inner Harbour. I don't have exact figures in

front of me, but some of those industrial property holders saw their

assessments go up 50 to 100 percent last year. We tried to help them

out a little bit. This is very complicated stuff. I'm trying to

simplify it for the Minister of Municipal Affairs; I'm sure he doesn't

understand all the implications of this act, or at least he didn't give

me to understand that he did. Their assessments jumped astronomically.

Everyone cried: "Help! We've got to do something about this." They came

to city council and hammered on the door and said: "You are going to

tax us out of existence. Reduce our taxes." It's always the local

council that has to deal with the results of provincial legislation

vis-à-vis a real estate tax system.

Not being one to panic when inundated by a very intense lobby, I and

my staff decided to take a look at what was happening to the assessment

system for industrial property holders in the Inner Harbour, of which

there are, as I've said, about 93. What was happening is something that

has to be rectified by an in-depth reappraisal, a relook at the tax

system for municipalities. I wish I had a board so I could draw it. You

have industrial property holders close to the water; behind and

surrounding them is what is called upland property. What was happening

is that certain interested developers and property holders were talking

about major condominium developments and escalation of land prices. It

was all fliers. Former alderman Bob Wright, who is a well-known Socred

supporter, flew an idea that he was going to redevelop what's called

the Rock Bay area into an exclusive, expensive condominium housing

development. Because of that flier — again showing the unscientific tax

system — values of the upland property surrounding those industrial

bases escalated overnight, not based on any earned wealth. The unearned

syndrome again. The industrial property holders adjacent to that area

where the flier was put up in terms of a huge development saw their

assessments go up accordingly.

[11:30]

Those industrial property holders want to do work. They want to

build. They want to employ there. They want to use that land for

industrial purposes. The industrial infrastructure of Victoria is

extremely shaky, and it's not being helped by this particular budget or

this government's attitude to regional economic planning in this area.

But that's another issue; if we ever get back to the budget debate I'll

talk about it. Those industrial property holders just want to do a

little bit of business — B.C. Forest Products, machinery works. Some

industries have been there for 50 or 100 years, providing jobs for 50,

60, 70 people. Little groups of woodworkers who occupy maybe five or

six lots on industrial property and who for years have paid a

reasonable tax level suddenly, because of this speculation — this

unearned wealth syndrome that is a major factor on the real estate tax

system in British Columbia — are facing assessments and taxes based on

inflated market values in the upland areas. Think about that. That's

what you base your tax system on. That's what you try and tinker with

with the variable mill rate. I suspect that's why this government has

had to introduce

section 10, which will allow industrial business

people certain exemptions. They know they've got to introduce these

kinds of exemptions because that very system they continue to support

and refuse to analyze at its root won't work and is unfair.

I saw first hand that industrial property holder situation. They

said: "We have no intentions of selling. We don't want condominiums on

our property." Well, maybe one or two of them did. But many of those

industrial holders in Victoria — and I'm sure some of my colleagues on

this side will talk about industrial holders in their ridings — are

dedicated, long-term employers in this region. Many of them are old

family businesses and want to continue to operate, but it's been made

extremely difficult by a tax system about which basically for 100 years

we've said: "It's really a bad one. We wish we could do something about

it, but no one's got the guts to do it." This government should have

the guts to do something about it, because this very piece of

legislation shows the flaws: they have to exempt business and property

taxes at certain times from the property tax system. This piece of

legislation and the next piece — Bill 12, I believe it is — is just a

tinkering, just a band-aid. It does nothing to resolve the long-term

problems of taxes at the municipal level.

I would like to suggest that if this government is serious about giving a hand to the industrial property holders....

I have a particular soft spot for those industrial property holders

in the city of Victoria, because indeed many of them are family

businesses and have been here a long time. They provide not a lot of

jobs, but combined together they are a major source of employment.

They're good, solid Victoria families, and they care about this

community. They're not like the multinational corporations, which at

times don't particularly care about a community. These industrial

property holders that I'm talking about in Victoria...

MR. REID: And around the province.

MR. BLENCOE: You talk about your own riding and I'll talk about mine.

... have been here a long time, and they care.

The government Whip has given me a note, and I'm afraid I can't read his writing.

MR. VEITCH: Sit down and I'll tell you.

[ Page 623 ]

MR. BLENCOE: Am I being trapped, Mr. Speaker? You wouldn't do

that to me. I'm a rookie MLA in this House just trying my best to get

along with the government and give you a few ideas on how you can

improve your legislation and really do a favour to the taxpayers of

British Columbia.

If this government is serious about helping those industrial

property holders — and I've tried to share my thoughts about the ones

we have in Victoria — they would devise a provincial industrial policy.

Don't put in

section 10 of the variable mill rate, which really can be

abused if certain friends of the government say: "Hey, give me an

exemption." That's not the way to do it, because if you're doing that

it shows you've got some real problems with this tinkering. Even with

the tinkering there are flaws. The tinkers won't work.

What this government should do is introduce an industrial policy

that says, in effect, that industrial land — I don't know the exact

wording; I don't profess to be a lawyer — should not be subjected to

uplands speculation creating high assessments of those industrial

properties. There should be a special class of industrial properties —

and there is — because the total assessment system looks at all land in

a particular precinct and says that if an industrial property holder or

some developer wants to build a condominium it's going to be worth

this, and so we're going to tax you with this. There should be a policy

to eliminate that kind of speculation and that kind of impact on

industrial property. I would suggest to this government that if they

are really serious about helping the industrial property holder, they

will look at a provincial industrial policy that will resolve that

problem. I agree that it has to be done.

I'm quite prepared to give a hand to the Minister of Municipal Affairs

if he wants some ideas from the city of Victoria or from some of our other jurisdictions.

We'll give you our concerns and how we think it could perhaps be worked

out. But don't put in an exemption that can be abused. It's reminiscent

of the regional planning bill before us, Bill 9. Some would say — I'm not

saying I would say this — that this is the Spetifore amendment of the variable

mill rate legislation. The fact that they now have an exemption in here just

for industrial and business property holders could make it subject to abuse.

If they're serious about trying to relieve those problems for the industrial

and business property holders, they should deal with that in separate legislation

and in a separate industrial policy.

As I said, our party is not necessarily enamoured with this piece of legislation.

Interjection.

MR. BLENCOE: Well, Mr. Speaker, you see, the minister didn't

give us the opportunity to take a look at the particular aspects of the

legislation. We didn't see the act. We now see all sorts of things in

here that really do give us some concern.

I would like to move adjournment of this debate until the next sitting of the House.

Motion approved.

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 11:43 a.m.

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